Private equity funds have supplied much of the capital injected into the oil and gas exploration and production sector over the last decade. These investors will typically seek to identify, acquire, operate, enhance, and ultimately exit from an investment within a defined investment period. Assembling a strong management team at the front end of an investment and maximizing returns with a clean exit at the back end are two key areas of focus for a typical private equity fund investor, and these points often drive considerations for the counterparties in private equity deals.

The intent of this chapter is to provide an overview of key concepts and provisions likely to be raised (other than with respect to tax provisions) when negotiating purchase and sale agreements (PSAs) with private equity-backed companies. The provisions discussed and solutions suggested in this chapter are not in any way meant to be exhaustive either as to the provisions that impact Buyers and Sellers who do business with PE Sellers or PE Buyers or as to the compromises with respect to such provisions, but are intended to assist counterparties that find themselves buying oil and gas assets from, or selling those assets to, private equity-backed entities.